CP Roughed Up $250M by Alaskan Tax, Beefed Up $350M via Canadian Tax

This update is intended to give an overview of market and operating conditions experienced by ConocoPhillips during the fourth quarter of 2007. The market indicators and company estimates may differ considerably from the company's actual results scheduled to be reported on January 23, 2008.

Fourth-quarter production on a barrel-of-oil equivalent (BOE) per day basis, including Syncrude and excluding LUKOIL, is anticipated to be approximately 60,000 BOE per day higher than the previous quarter. Exploration expenses are expected to be approximately $250 million before-tax for the quarter.

During the fourth quarter, the state of Alaska enacted new production tax legislation that is anticipated to have a negative after-tax impact of approximately $250 million, of which approximately $100 million is retroactive to prior periods in 2006 and 2007.

Fourth-quarter results are expected to be positively impacted by approximately $350 million due to a tax-rate reduction recently enacted in Canada and the release of escrowed funds in connection with the extinguishment of the Hamaca project financing indebtedness.

ConocoPhillips' debt balance is expected to be approximately $21.7 billion at the end of the fourth quarter. The company anticipates fourth-quarter repurchases under the share repurchase program to be approximately $2.5 billion, for a total of approximately $7 billion for the year. The number of weighted-average diluted shares outstanding during the fourth quarter is expected to be approximately 1,612 million.